Published On: Tue, Jul 21st, 2020

Help to Buy ISA: The key deadline to note with this account if property purchase fails | Personal Finance | Finance


Getting on the property ladder can seem like a difficult task. From raising a deposit for a mortgage to finding the perfect first home, there’s a lot to think about.

For some, saving for this purpose will be done with the help of a particular type of account.

There are two accounts which offer a 25 percent government bonus up to a certain amount, for the purpose of purchasing property for the first time.

These are the Help to Buy ISA and the Lifetime ISA.

The Help to Buy ISA is no longer open to new savers, however those who opened an account before midnight on November 30, 2019, can continue saving in this account – for the time being.

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Savers can continue using their account to save until November 20, 2029.

Then, they have until December 1, 2030 to claim the bonus.

With the scheme no longer open to new savers, some may wonder what happens if there’s a hiccup when they use it to purchase a first home.

However, there is some guidance on what happens if the property purchase fails.

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The Help to Buy section of the government website answers this particular concern.

It confirms that a Help to Buy ISA can be reopened if a property purchase fails.

The guidance explains “under the scheme rules you have the right to reopen your account if your property purchase fails – however you must present a Purchase Failure Notice (PFN) to your ISA Provider”.

It continues: “You must also request to reopen your account within 12 months of the account closure date (which can be found on the closing statement).

“Once you have reinstated your account, you can save into your Help to Buy: ISA until 30 November 2029, with a further 12 months to claim your bonus (until 1 December 2030).

Some in this situation may well wonder whether this would need to be done with the same provider – or whether it could be done with another provider.

Gov.uk explains that a person can “re-open your account with the same provider as your previous Help to Buy: ISA if they still offer the product, or you could open with a new provider (should they choose to accept a transfer).

“If your previous provider does not offer the Help to Buy: ISA anymore, they must ensure that you are able to open a Help to Buy: ISA account with an alternative provider.”

While the government bonus is 25 percent on savings in the Lifetime ISA, there is a limit to be aware of.

A maximum of £200 can be paid into the account each month.

That said, in the first month, savers can add an additional £1,000 on top of this, to kickstart the account.

The minimum government bonus is £400, while the upper limit is a bonus of £3,000.

At least £1,600 must be saved in order to receive the minimum government bonus.



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